Don't Build Those Euro Reserves Just Yet

Enterprising central banks might want to think twice before switching from the dollar to the euro as their preferred reserve currency of choice. For example, they might want to consider the Chiemgauer, a currency whose circulation is fast growing, and can buy some great cheese (and wine) in certain parts of Europe. According to an article in The Telegraph, "the Chiemgauer is one of 16 regional currencies that have sprung into existence across Germany and Austria since the launch of the euro five years ago ... Another 49 regios are in the pipeline. They are outside the control of the political authorities, mostly run by activists, farmers, eco-enthusiasts, anti-globalists, and citizen committees." Now, I doubt that your SAP system will support the Chiemgauer for cross border transactions just yet, but if you're worried about a hedge against EU-wide stagnation, perhaps sourcing in this local currency might make sense.

Jason Busch

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